A Study On The Correction Between Top Management Compensation Incentives And Corporate Performance Of Zhejiang Private Listed Company

Scholars study the compensation incentives continuously, to enlarge and complete the theory of it. Some of them study compensation incentives from a macro point of view, while others study this area from a micro point of view or combine the two aspect. Under the economy crisis situation, executives compensation has been the hot topic. Top management has been one of the most important research object. According to the theory of principal-agent, because of asymmetric information and inconsistent of the client and agent objective function, that bring the agency cost. How to reduce the agency cost and make the benefit between the top management and the consistent, we can make compensation contract.At present, there is no a law to standardize top management compensation incentives in china, but the government formulate some policy in order to guide the compensation incentives of listed company. For example, on 16th September, 2009, was produced, it plays an important role in the compensation incentives of listed company.This paper describe the theory of incentives from both aspect of economics and management, and research the effects of the compensation incentives in Zhejiang private listed company, then conclude the suggestion for them. By using the principal components and regression methods, analyze the relativity between the compensation, stock proportion of the governor holds, and corporate performance of Zhejiang private listed company. The conclusion is below: (1) Corporate performance doesn't related to the pay of top management significant; (2) Corporate performance doesn't related to stock proportion of the governor holds significant; (3) The pay of top management doesn't related to corporate performance and the size of corporate; (4) The pay of the top manager related to stock proportion of the governor holds negatively.Taking Zhejiang private listed company as the research object, the main reason is that: firstly, in recent years the ratio of Zhejiang private listed company rank first in china's private listed company, promote the development of Zhejiang economy, so it has practical significance; secondly, there is no enough literature on compensation incentives of private listed company, the result of this paper will rich the theory of the compensation incentives of private listed company; thirdly, propose some suggestions for Zhejiang private listed company in formulating the policy of compensation.